If your company is constantly in the red and you are unable to pay your debts, you may be considering bankruptcy. As with any legal course of action, it is critical to consult with an experienced business attorney. Below are some suggestions if you are considering filing for bankruptcy.
Bankruptcy: Bankruptcy is always an option if your business is deep in the red and creditors are coming after you. However, you must really think through your options before filing for bankruptcy.
Your Bankruptcy Options
- Chapter 7: Under this type of bankruptcy, a bankruptcy trustee will liquidate, or sell off, all the eligible property in order to satisfy your personal debts, including those that were taken on behalf of the business. At the end of the bankruptcy process, your debts may be wiped out by the discharging of your bankruptcy.
- Chapter 13: Under Chapter 13, you will need to propose a repayment plan to the bankruptcy court. This plan is based on your income and you will need to show the court how you plan on paying off your debts over a period of time. Unlike Chapter 7 bankruptcy, none of your property will be sold under a Chapter 13 bankruptcy.
Advantages of Bankruptcy
One of the main advantages that can come from filing for bankruptcy is time. Once you have filed for bankruptcy, the bankruptcy court normally puts an automatic stay on all debt collection, meaning that none of your creditors can foreclose on or repossess your property.
If your business debts are large and it is possible that you will be held responsible for them, you should talk to an experienced bankruptcy attorney as soon as possible to figure out the best option for you.
Contact Andrew Weisblatt
Collecting unpaid debts are essential to the success of any business. Texas attorney Andrew Weisblatt is a skilled Houston B2B business collections attorney who understands how to effectively collect from businesses that may be reluctant or unable to pay their outstanding financial obligations. To schedule an appointment with Mr. Weisblatt, call our Houston office today at 713-666-1981.